Musk ridicules SEC putting Tesla back in peril
Another day, another tweet storm from Elon Musk that has the potential to cause major problems for Tesla Inc.
Musk went into overdrive late Thursday with more than a dozen tweets targeting the Securities and Exchange Commission (SEC) and short sellers within five hours. Less than a week after settling a lawsuit with the SEC, he mocked the agency by referring to it as the “Shortseller Enrichment Commission” and sarcastically quipped that it was “doing incredible work.”
The tweets may imperil a deal struck with the SEC on Saturday—which isn’t final—that bars Musk from serving as chairman of the carmaker for three years as punishment for problematic posts he sent about taking Tesla private. As part of the deal, the company also has to implement procedures and controls to oversee Musk’s communications, including his social media missives.
“At the very the least, they can read the riot act to Musk’s lawyer,” said Stephen Crimmins, a former SEC enforcement lawyer who’s now a partner at Murphy & Mcgovern. “Beyond that, if they feel he hasn’t lived up to his deal, they can theoretically seek to pull the settlement.”
Tesla shares dropped as much as 6.6% as of 12.12pm Friday in New York. The stock was down 9.5% this year through Thursday’s close.
Representatives for the Palo Alto, California-based company didn’t respond to requests for comment. Ryan White, an SEC spokesman, declined to comment.
The posts may test the boundaries of Musk’s agreement not to deny wrongdoing and risk reviving stiffer forms of punishment. Last week, the SEC sought to prohibit him from serving as an officer of a public company. A federal judge still has to decide whether the penalties levied against the CEO are appropriate.
Musk also dragged BlackRock Inc. into his long-running dispute with short sellers, claiming that the fund manager was reaping heavy profits by lending shares they hold to this group of investors. Representatives for Blackrock in London weren’t immediately available for comment. The company held about 3.8 percent stake in Tesla as of the end of June, according to data compiled by